Sri Lankan government green lights 700 MW solar power project in Kilinochchi
Daily FT: The Government approved the establishment of a 700 MW solar power plant, complemented by a battery energy storage system at Kilinochchi Poonakary Lake proposed by United Solar Energy SL with an investment of over $ 1.7 billion.
Accordingly, a Cabinet-appointed negotiation committee will be formed to assess the proposal, laying the groundwork for a comprehensive evaluation and recommendations process.
“This endeavor is poised to provide an impressive power supply of 134 MW, marking a significant step towards bolstering renewable energy infrastructure in Sri Lanka. It is one of the biggest investments the Northern Province has secured so far,” Cabinet Co-Spokesman and Minister Bandula Gunawardena said at the post-Cabinet meeting media briefing recently.
The project represents a substantial foreign direct investment of $ 1727 million, with $ 500 million earmarked for domestic project components. As part of the comprehensive plan, the project proponent company intends to construct three anicuts around Poonakari Lake, fortifying the area against potential seawater intrusion at an estimated cost of $ 13.5 million.
The Northern Provincial Council, the Northern Provincial Irrigation Department and the Agricultural Development Department have already extended their support, offering a 35-year lease agreement for 1,080 acres of the shallow lake area. “This cooperative agreement is pivotal in facilitating the establishment of the 700 MW power plant showcasing a collaborative approach towards realizing this groundbreaking renewable energy initiative,” he added.
In tandem with this development, Gunawardena said the Cabinet approved securing to solicit expressions of interest (EoIs) from potential investors keen on spearheading renewable energy initiatives with a capacity of 50 MW or greater. “This move aligns with efforts to expedite the implementation of robust renewable energy programs across the country,” he added.
The proposal to this effect submitted by Power and Energy Minister Kanchana Wijesekera was approved by the Cabinet of Ministers.
OSL take:
Sri Lanka’s power industry, especially the renewable energy sector, is a fast expanding one with many business/investment opportunities. The Sri Lankan government’s policy of increasing the capacity of renewable and clean energy generation to 70% of the total power generation mix has opened up a host of new business/investment opportunities in the country. The growth and profits recorded by local businesses engaged in the renewable energy sector is a clear indication of the growing business potential in Sri Lanka’s renewable energy sector. Also, many foreign businesses in the renewable energy sector have already expressed interest to enter Sri Lanka’s power industry. Given the growing demand and the support of the local authorities to develop and expand renewable energy projects in the country, foreign businesses/investors could confidently explore the growing opportunities in Sri Lanka’s renewable energy sector. Foreign businesses could also look at forming partnerships or joint ventures with local businesses engaged in the sector with the aim of further expansion.
| Article Code : | VBS/AT/20230921/Z_1 |